Yes, I think that’s been mentioned in other posts here. Lake Forest City to Mountlake Terrace?!! WTF??!!

Only an outsider would make such a stupid move.

This is not strictly true. Demographic or cultural shifts can change local markets (for example, urban vs. suburban), which can make some sub-markets appreciate at the expense of others. So your long-term returns could be greater or less than the rest of the market.

My other gripe – housing appreciates with wages, not with inflation. Historically, wages appreciate about 1 percent faster than inflation, but real wages have suffered over the last five years. So, strictly speaking, if wages continue to appreciate more slowly than inflation, housing has even further to fall!

I feel like it’s Christmas!

‘Night all and sleep tight. Good news tomorrow.

When the MLS report lists the asking to sales price ratio, does it use the initial asking price or the final asking price, in the case where the price was increased or reduced during the listing period?

Hey Shuggy, I thought price reductions meant only that “the property was overpriced to begin with”…

When did you start thinking price reductions are “gloomy news”?

You are so close. The FED can not control mortgage rates. Those rates are set by the open market, and not by gov’t fiat.

If the FED were to go on a printing spree (cutting rates, and monatizing bonds), they would flood the market with dollars and cause inflation. Bond purchasers would have to jack up interest rates to cover their inflation risk. This would make the monthly payment more expensive, less affordable, and with a substantially cheaper house.

Borrowers and sellers would both lose, big time. People could pay cash, and make out big time, but they would be burying their money in a static, or deflating asset, in lieu of putting their money into a higher yielding vehicle.

The FED is trapped. They have no way out. Inflate or default. Either route will kill the economy.

They need the Ballard Miracle to happen all across the US.

Well, genius, I guess you havn’t thought much about the fact that it’s actually the housing bubble that the Fed is targeting. They may want a soft landing instead of a crash but history shows they almost never get it. What’s the result? a) first they bust the bubble, prices fall faster than they would like, b) THEN THEY LOWER INTEREST RATES to try to prevent a depression.

SO those who are smart enough to wait a few years will end up with BOTH LOWER PRICES AND LOWER INTEREST RATES. You must be a moron to think that rates will only go up forever! But I should have expected that since that’s what you think is going to happen with house prices.

In a couple of years, those with half a brain will end up with lower prices and lower rates (maybe below your beloved 5.x%) and you’ll just end up with a house worth less than you bought it for. At least you’ll be able to refinance when rates drop lower than your current rate…

CA., Boston, Miami, Seattle all ripped from the fundamentals. Check it out. Ripe for a fall.

One of the “interest sensitive” markets that David Lereah was screaching about last week.

What a surprise.

And quit lying about everything going over asking ‘Shug. You really have to stop lying to yourself man.

You’re gonna give yourself a breakdown. Just don’t even pay attention to the housing news from here on in because it’s only getting nastier and nastier.

The U. S. Dept. of Treasury is calling Fannie Mae to the carpet for corruption and possibilty of systemic risk.

CA. Assoc. of Realtors is predicting that, if the summer trend there keeps up, by Fall ‘06 they will have sold fewer houses than at any point in the past 24 years. yes that’s 24 years.

When the Assoc. of Realtors says that, it’s time to listen, no matter how bullish you are on RE.

The articles are on today’s “housing bubble blog”, Wed. June 28.

“Why then are you printing so many negative articles about our real estate market?”

LOL. Is someone worried?

That is an interesting site…but is at best only a vague indication of what is going on. The prices are the asking prices, not the sold prices. Since most houses have been going for more then asking, these #s don’t tell you much.

We’ll have a better idea of the situation when the MLS report comes out next month. That will show what houses really sold for….

re: 1990s inventory

I really, really want to see this data.

Could you please provide a link to the data you claim you found the MLS statistics site. I can’t find it.

Thanks.

http://www.benengebreth.org/housingtracker/location/Washington/Seattle/

This month inventory up 9%, median price up .1%

The 3-month trend is inventory up 35%, median price up 3.5%

Ruh-roh.

I do wish this data included # of sales, though. If inventory is up, and sales are down, that’s not a good trend for sellers.

This is fantastic; from Arizona! bwahahah!

Keep it up Meshugy!

How true. It is so sad that it only takes a very basic education to understand this, but most Amurikunz can’t possibly fathom this.

For anyone that thinks this is a “normal” market, ponder this:

Q) Why doesn’t every homeowner in the entire PNW just crank up the price of their home to $5M minimum?

A) Easy. No one would be able to buy them. Prices would have to come down to meet the buyers.

The past few years, the toxic loans have given buyers more money than they usually have. This has moved the bar up, and allowed sellers to raise prices. When these loans vanish, and equity disappears like a virgin on prom night, sellers’ prices will have to plumb depths to find buyers.

Imagine there’s no equity…
It isn’t hard to do…
Nothing to bid up homes with..
and no toxic loans too…

Imagine all the people…
Showing income pay stubs…
Saving every penny…
and bypassing airport backrubs…

When you were little and went on a family car trip, how soon did you start screaming “Are we there yet?!!!”

I’m guessing about 10 minutes into a 6 hour ride.

When you were little and went on a family car trip, how soon did you start screaming “Are we there yet?!!!”

I’m guessing about 10 minutes into a 6 hour ride.

Wholly Crap Meshugy? Denial just ain’t a river in Egypt. Interesting how you get cornered on a thread, and then like Golem, steal off to your cave and start ruminating on your precious MLS numbers

As Schiller says, when the psychology changes, watch out below!

exactly!

Obviously you’re a Shiller Ph.d.-phobe, but if you picked ‘Irrational Exhuberance 2nd.’ he’d clue you into the fact that this is driven by a combination of psycology and refugee-investors from the dot-bomb bust of 2000… and with rising rates this psychology is actually amplified because people, like you, parrot the insane poorly-educated notion that if you don’t buy in now, you’ll never be able to afford.

Hint: Houeses have always tracked inflation over the long term, why? because people have to be able to buy them.

Now that the true picture is coming to light, watch for the psychology to change.

As Schiller says, when the psychology changes, watch out below!

What went up will come down.

Once people start listening to world economists instead of their local realtor, watch out.

A lot of people still think that their realtor is an “expert” (!).

When they start seeing the realtor and mortgage brokers as crooks, it’s all over.

Some consumer group went to WA. DC last week to expose realtors as a cartel of sorts.

The mortgage industry is being blasted daily.

When these people are exposed for what they are, buyers will cease buying.

18 months later, JNPR was selling for $5/share. That’s a 98% rollback of an “in demand” stock.

This is going to be loads of Schadenfreude fun. Living in the PNW is going to give me ring-side seats to the Main Event.

I’m wondering how high they’d have to go before prices come down? They’ve already gone up significantly since last year, when you could get a rate below 6%. By the end of the year you’re probably looking at over 7%.

Despite the rising rates, we still have had huge price appreciation. Most of which occurred in the last few months when rates have risin the most. How can you explain that? I think there’s simply too much demand in Seattle.

Interesting psychological analysis of M.
You could be right.

Maybe you want to see somebody about that M?

Think about it, instead of driving yourself into a frenzy every day coming here, you could be relaxing and living the good life in Ballard.

Hmmmm…..Make myself nuts or relax and enjoy?

What to do?…. What to do?….

You will also, with a lower home price, be able to possibly pay your home off and OWN it rather than rent from the bank for a lifetime.

But if you don’t feel that way, get out there TODAY and buy a house before interest rates go up again tommorrow.

wow, Meshugy, how’s that Realtor KoolAid taste? Too late to buy? Priced out forever?… hmmm…

Those of us that didn’t buy last spring actually don’t have to pay anything this year… If you were really betting dollars to donuts you would’ve taken the $1000+ surpllas in cash from renting an equivelant property and bought Gold with it last spring, now you could sell it and pocket %40 profit in little under a year.

Ballard real-estate? specuvestor fever, that and its purely liquid, not tied up in a interest/mainatance/tax sucking entity like an overpriced older home.

So chill the smugness there Meshugy, you’re on this blog because you’re a sucker for bad news and unfortunately for you, the housing bad news is starting to pile up, its the longterm trends in RE, there is no black tuesday, its not about ‘right now’

If you bought a median priced Seattle house in April 2005 (when I bought) you paid $351,750 and got a 30 year fixed for 5.8%. Your final amortization of that loan is $743,004.00. Your monthly payment would be $2063.90

If you bought a median priced Seattle house in May 2006 you paid $415,00 and got a 30 year fixed for 6.5%. Your final amortization of that loan is $1,364,909.71 Your monthly payment would be $2623.08

So those of you who could have bought last Spring but didn’t, you now have to pay $621,905.71 more ($559.18 per month more) for the same house you could have bought last year. Wow….that really shows the difference that interest rates make.

So if you divide $621,905.71 by 13 months (that’s how long it’s been since I bought), every month since April 2005 it cost $47,838.90 per month more to wait to buy. So the combination of rising prices and rising interest rates is costing you $47,838.90 per month to wait.

Daryl Reaugh with the color commentary…

But oh yeah, I forgot, this is Seattle, no meltdowns gonna happen here.

Same goes for Phoenix- according to the people there, no meltdowns.

Wonder who CNBC is reffering to when they talk about a housing meltdown?

If you’re not a fool, then sell! If you’re able to make a living somewhere else, pocket the cash, then move there….

Right now you’re just a fool who niavely waved an inspection on the largest asset he owns and bought into an overheated overpriced market….

If you’re not a fool, then sell! If you’re able to make a living somewhere else, pocket the cash, then move there….

Right now you’re just a fool who niavely waved an inspection on the largest asset he owns and bought into an overheated overpriced market….

Help me out with a link, brother. Thanks.

Yesterday, I heard another one.

Some dude took out a 1% ARM for a 300K loan. His buddy asked about his bad credit, and it was no problem, as his mortgage is less than his rent was. Best of all? The mortgage company didn’t need to see any of his paystubs.

WTF?

About two months ago, the 50y mortgage made its advertising blitz.

Then you have the standby “a loan should be no harder than ordering a pizza” nonsense, and my least favorite – Jay Shippley, that doesn’t need to “stick it to ya.”

OK, tell me this does not end in tears. You have garden variety morons that can get $300K, with no docs, at the top of the market.

Back in ‘00, I had zero debt, perfect credit, and enough liquid assets to buy my house, in an upscale neighborhood, for cash. My bank of 10 years (where I stashed my cash) would not loan me any money for the house.

Why?

My income didn’t match their ratios, and they said I just had a “career change.” I went from Naval Aviator to airline pilot, and that constituted a career change.

Now, any idiot can walk out of a bank with 10 years of income in hand for a PNW crap-box.

When this phenomenon ends (and it will), practically nobody will be able to put $30K down on a house. Without that, it will be very difficult to get homes over the $150K range.

Pop some corn, and chill the beer. This is going to be fun to watch

He bought April 2005?! Frickin’ idiot!

Now he’s got @ 50K of UNREALIZED profits?!

Better go out and spend that money NOW Meshugy. By next year this time, it’s all going to be gone, and then some.

You stupid fool.

Hope your next novel/ song/whatever hits it big. You’re gonna need it.

You’ve been coming on this list now for months. You’re obviously worried about the housing market- terrified in fact.

Instead of taking good advice and looking at real facts provided on this and other blogs and getting out with your money while you still could, you decided to try to single-handedly *stop* the housing meltdown wuith your pablum articles and lies.

Your loss. Jerk.

Can you provide a link?

Since that time our house has appreciated 75K. Additionally interest rates for a 30yr fixed have jumped from around 5.8% to 6.5%. So far it’s been a great investment…and we lucked into a fixed interest rate that is historically close to rock bottom.

For some perspective, check this article from 1986!

SOME MORTAGE RATES BELOW 10%

1) waive inspection (sellers would balk at any offer subject to inspection).

2) overbid with an accelerator clause (usually there were at least 10 other bidders).

I though that maybe some of these practices might have fallen by the way side. Apparently the market is still tight enough to warrant this sort of activity. See:

What’s a buyer to do?

Where did you get that data?

Thanks!

you aren’t looking in the right place :)

In May 1998 there were 4,837 New Listings posted. In May 2006, there were 4,130 New Listings. In May 2005, there were 3,914 New Listings. All numbers are for King County only.

Homeowners are making fewer late payments than they were at the end of 2005. They’re making more late payments than a year ago, but only because of Hurricane Katrina.

The correct answer is B, according to the Mortgage Bankers Association

Hahahahaha! Mortgage Bankers Association? Ooooh, I trust them! Come on everybody, get in there while the gettin’s good! Can you fog a mirror? yes? well we’ve got a negative amortization loan with your name all over it! Because WE look beyond the numbers!!…

These people are used car dealers in sheeps clothing….

Have you no analyitical neurons to fire off? Do you bother reading anything in the business section about interest rates/inflation/ leading economic indicators like the recent dive in builder’s stock? Historical paradyms of bubble psycology ala Japan/Florida circa 1929? Or do you just lie to yourself and hit the MLS listings every morning like a junkie hits his needle?

Why don’t you start your own blog somewhere… call it Ballard=Pleasantville… Geezus, you’re annoying.

Exactly!